The United States Court of Appeals for the Federal Circuit recently decided two patentability cases of particular interest to the computer and electronics industries. In In re Stephen W. Comiskey, No. 2006-1286 (September 20, 2007), the Federal Circuit reaffirmed that a pure business method consisting only of mental processes, without a computer system component, is not patentable. In In re Petrus A.C.M. Nuijten, No. 2006-1371 (September 20, 2007), the Federal Circuit held that claims directed to an electrical or electromagnetic signal – as contrasted to a means for creating or storing signals – are not patentable because they do not constitute a “process, machine, manufacture, or composition of matter” under 35 U.S.C. § 101. Both cases highlight the importance of including a variety of claims in a patent application, to help ensure that a change in the law does not render a granted patent worthless.
Comiskey Business Method Claims
Under U.S. law, patent protection may be obtained for “any new and useful process, machine, manufacture, or composition of matter …” (35 U.S.C. § 101). Comiskey’s patent application claims a method and system for mandatory arbitration involving legal documents, such as wills or contracts. The independent method claims recite the steps of enrolling a document and its authors, inserting arbitration language, enabling a complainant to request arbitration, and conducting arbitration resolution. Comiskey at 2-3. The independent system claims recite the structural limitations of a registration module, an arbitration database, and an arbitration resolution module. Id. at 3-4. In the U.S. Patent Office, the examiner rejected the claims as being obvious in light of three prior U.S. patents and the Board of Patent Appeals and Interferences affirmed the rejection. Id. at 5-6. Comiskey then appealed to the Federal Circuit where the issue of patentability under 35 U.S.C. § 101 was considered for the first time. Id. at 7.
After concluding that it had the authority to decide the case on § 101 grounds, a panel of the court – made up of Chief Judge Michel and Circuit Judges Dyk and Prost – assessed
Comiskey’s method claims under the leading business method precedent, State Street Bank & Trust Co. v. Signature Financial Group, 149 F.3d 1368, 1377 (Fed. Cir. 1998). The court observed that business method patents are “subject to the same legal requirements for patentability as applied to any other process or method,” including the requirements of § 101. Id. at 13. The court then stated that “abstract ideas” are one type of subject matter that has been consistently held to fall beyond the reaches of patentable subject matter under § 101. Id. at 16. The court noted that there are only two instances in which a method or process may qualify as patentable subject matter under §101: when the process is (1) tied to a particular apparatus, or (2) operates to change materials to a different state or thing. Id. at 17 citing Diamond v. Diehr, 450 U.S. 175, 184 (1981). Therefore, the court stated that a claim involving both a mental process and one of the other categories of statutory subject matter (i.e., a machine, manufacture, or composition) may be patentable under § 101; however, mental processes – or processes of human thinking – standing alone are not patentable even if they have a practical application. Id. at 18-19.
The Federal Circuit found that Comiskey’s method claims are unpatentable under 35 U.S.C. § 101 because they merely recite a mental process standing alone and untied to another category of statutory subject matter. Id. at 20. The court reasoned that it is clear that the present statute does not allow patents to be issued on particular business systems that depend entirely on the use of mental processes. Id. at 21. Noting that Comiskey has conceded that the method claims do not require a machine and finding that the claims do not describe a process of manufacture or a process for the alteration of a composition of matter, the Federal Circuit concluded that Comiskey’s method claims merely seek to patent the use of human intelligence in and of itself. Id. at 22.
By contrast, the Federal Circuit also held that Comiskey’s system claims, which recite the use of various modules, could require the use of a computer and, therefore, recite patentable subject matter under § 101. “When an unpatentable mental process is combined with a machine, the combination may produce patentable subject matter….” Id. at 22-24. That ruling does not end the inquiry, however. The court remanded the system claims to the U.S. Patent Office to determine whether the addition of general purpose computers or modern communication devices to Comiskey’s otherwise unpatentable mental process would have been non-obvious to a person of ordinary skill in the art. Id. at 25.
Nuijten Signal Claims
In Nuijten, a panel of the Federal Circuit considered whether an electrical or electromagnetic signal is patentable subject matter under 35 U.S.C. § 101. Nuijten’s patent application discloses a technique for reducing distortion induced by the introduction of
“watermarks” into signals. Nuijten at 2. Nuijten’s application included claims directed to a method for adding a low-distortion watermark to a signal, to an arrangement or system for embedding supplemental data in a signal, to a storage medium having a signal stored thereon, and to the resulting encoded signals themselves. Id. at 5-6. The U.S. Patent Office allowed the method, system, and storage medium claims but found the claims directed to the signals to be unpatentable under § 101 because they describe abstract ideas with no physical attributes and they fail to fall within one of the four statutory categories of patentable subject matter. Id. at 7. The rejection of the signal claims was appealed to the Federal Circuit. Id.
In a 2-1 decision, the Federal Circuit panel – made up of Circuit Judges Gajarsa, Linn, and Moore – found that the claims on appeal cover transitory electrical and electromagnetic signals propagating through some medium, such as wires, air, or a vacuum, and that the signals are not encompassed by any of the four enumerated statutory categories: process, machine, manufacture, or composition of matter. Id. at 8.
First, the court examined the issue of whether the claims are limited to covering only physical instances of signals or whether they also cover intangible, immaterial strings of abstract numbers. Id. at 9. The court found that signals require some physical carrier of information; however, the court noted that the claims do not specify what carrier element is to be used. Id. at 10. Because the text of the claims is not limited by any specified physical medium, the court reasoned that any tangible means of information carriage will suffice for the claims. Id.
Second, the court examined whether the claims fall within each of the four enumerated statutory categories. The court ruled that the claims do not recite a “process” because a process requires some action. Id. at 14. The court found that the recitation in the claims that the signal must be “encoded in accordance with a given encoding process” does not recite any action. The court stated that “the presence of acts recited in the claim does not transform a claim covering a thing – the signal itself – into one covering the process by which that thing was made.” Id.
The court then ruled that the claims do not recite a “machine” – defined by the U.S. Supreme Court to be “a concrete thing, consisting of parts, or of certain devices and combination of devices.” Id. citing Burr v. Duryee, 68 U.S. 531, 570 (1863). The court found that a transitory signal made of electrical or electromagnetic variances is not made of “parts” or “devices” in any mechanical sense and is not a “machine” under § 101. Nuijten at 14-15. The court also ruled that the signals – described as “fluctuation in electrical potential or electromagnetic fields” – are not a chemical union, gas, fluid, powder or solid and, therefore, do not recite a “composition of matter.” Id. at 17-18.
The court admitted that the determination of whether the claimed signals are “manufactures” is more difficult. The court recognized that the signals are man-made, but reasoned that artificiality is insufficient by itself to render something a manufacture. Id. at 15. The court cited Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) to define a “manufacture” as “the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery.” Nuijten at 15. The court found that the definitions for manufacture address articles of manufacture as being tangible articles or commodities. Id. at 16. The court then found that a transient electric or electromagnetic transmission does not fit within that definition because the energy embodying the claimed signal is fleeting and devoid of any semblance or permanence during transmission. Id. at 16. Because all signals within the scope of the claim do not themselves comprise some tangible article, the court found that the claimed signals are not “manufactures” under the meaning of § 101. Id. at 17. Thus, the court affirmed the rejection by the U.S. Patent Office.
Circuit Judge Richard Linn dissented-in-part to the majority decision of the panel. Judge Linn disagreed that the majority’s definition of manufacture limits the term “manufacture” to non-transitory, tangible things. Nuijten, dissent at 2. Judge Linn reasoned that the claimed signals contemplate some physical carrier of information and, therefore, qualifies as a “manufacture.” Id. Judge Linn found the signals to be a manufacture under a broader definition than that used by the majority. Id. at 7. Judge Linn then declared that the claims recite a “new and useful” invention and argued that the decision of the Board of Patent Appeals and Interferences should be reversed. In light of this dissent, and the significance of this issue, the patent applicant may seek a panel rehearing or rehearing en banc.
While both of these cases are notable for the claims they disallow, it is equally important to note that by including multiple claims each application survived, either for further review as in Comiskey, or as granted claims in Nuijten. Thinking creatively about the invention and including multiple claims in the application remains an important way to insulate a patent from the possibility that changes in the law might render certain claims invalid in the future.